The Process of Creating a Conservation Easement
1. Property Owner Engages Hill Country Land Trust
The first step for landowners interested in learning more begins with a conversation. Call or email us to learn more about our organization and its mission, and to give us the opportunity to get to know you and your plans for your property.
2. Hill Country Land Trust Visits the Property
When you are ready, we will arrange a time to tour your property, take photos, and to learn more about the goals you have for your land and its future. Our Conservation Easement administrator and a Board member from the Land and Easement Committee will conduct the visit. If the team believes your project meets our criteria, they will then discuss the project with the Board and ask them for approval to proceed.
3. Meeting with Landowner's Lawyer and Financial Advisor
The Hill Country Land Trust strongly recommends that the donor acquire his or her own legal representation and a financial advisor early on in the process who understands the specifics of conservation easements as well as the tax implications of an easement. Let us know if you would like some recommendations of firms recognized for their expertise in this area.
4. Preparing Conservation Easement Document
The terms of a Conservation Easement are negotiated between your attorney and ours, and are specific to the condition and circumstances of your property. A conservation easement is held in perpetuity, and as such becomes part of the chain of title for property. It’s important to take the time to build a strong document that will defend the conservation values of your land while still providing enough flexibility for future landowners. Including descendants.
5. Landowner Gathers Necessary Documents and Information
To begin the preparation of the Conservation Easement for your property, the following documents will be required:
a. Property survey, recent or updated
b. Title policy (Title Report or Insurance Policy) including severed mineral interests
c. Legal description(s) of property
e. Agricultural valuation or 1-d-1 wildlife tax valuation verification
Mortgages, rights of first refusal, options to purchase, life estates and other liens will require subordination, release or discharge and a "Nothing Further Letter" stating that no changes in ownership, land use or man made structures have occurred since the Title Policy will be required.
Other documents, if applicable, may be required of the land owner such as: pre-existing easements such as utility, road, or pipeline; trust or partnership agreements; mineral rights ownership and reserved rights; remoteness letter or recorded release; other party reserved oil, gas, or mineral interests; water rights permits; leases including hunting and grazing; and archeological or historic site designations.
6. Hill Country Land Trust Prepares Required Documentation
The first step in preparing a conservation easement documentis to gather data for the Easement Guidelines, which outlines the conservation goals and objectives. The Conservation Easement Administrator and a representative from the Land and Easements Committee will prepare this. Once the Easement Guideline is approved, it is given to the HCLT Board for a second approval, and then to the land trust's attorney for drafting of the legally binding conservation easement document.
Additional required documents are also prepared. A baseline report is required by federal regulations. It includes fieldwork to document, inventory, and photograph a property's existing conditions, improvements, and resource values. The purpose of the report is to show the condition of the property at the time the easement was donated. The baseline document also outlines any reserved rights. These may include the option to subdivide certain sections in the future, permission to build roads and infrastructure, and the description of specific ranching and farming activities. The conservation easement document is the final document. The Hill Country Land Trust will write the conservation easement, which the donor should carefully review with their attorney.
7. New Appraisal to Determine Your Tax Benefits
The difference between the open market value of property and one that has certain development restrictions as outlined in a Conservation Easement is recognized by the IRS as a charitable donation that can be deducted from the landowner's income tax for up to 15 years. In order to claim a federal income tax deduction the landowner must obtain what the IRS terms a "qualified" appraisal of the value of the donated conservation easement. The Hill Country Land Trust can provide you with a list of appraisers that are experienced with the conservation easement process.
8. HCLT Holds Land in Trust Forever
The commitment by Hill Country Land Trust does not end when the conservation easement is recorded; it is just beginning. Once a year, we will contact you to schedule a monitoring visit to your conserved land. We will want to report that the easement is being enforced and the provisions being followed. Landowners will receive a copy of the monitoring report and can also request a detailed custom management plan at no additional cost to assist them in meeting the stewardship goals for their property.